Mortgage securities kept pace with agencies and swaps, but slightly underperformed Treasurys. The price for
Fannie Mae
30-year mortgage securities with 7 1/2% coupons remained at Thursday's level of 99 28/32, while 10-year Treasurys gained 3/32 to end at 99 17/32.

Traders said many took the day off to celebrate Veterans Day in advance, which resulted in the session's trading volume being only one-tenth of the day before.

Buyers and sellers have themselves well positioned and are waiting to see which direction stocks and Treasurys will take when the election's outcome becomes more evident, analysts said.

And many paid particularly close attention to movements in the stock market and the Treasurys yield curve.

On the Treasurys front, flight to quality pushed up prices on shorted-dated Treasury notes, but mortgage-backed securities traders were unimpressed. And the yield curve, which has been steepening slightly in the past few days, was mostly unchanged Friday.